On October 7, 2015, the Department of Justice (DOJ) announced that, PharMerica, one of the nation’s largest pharmacies in the nursing home industry, has agreed to pay the U.S. government $9.25 million to resolve allegations that it participated in a kickback scheme involving pharmaceutical manufacturer Abbott Laboratories. The settlement resolves allegations that PharMerica received kickbacks from Abbott Laboratories in exchange for recommending to physicians that they prescribe Depakote to nursing home residents, and that by accepting such kickbacks PharMerica violated the False Claims Act (FCA).

PharMerica, headquartered in Louisville, Kentucky is the second largest nursing home pharmacy in the United States. Depakote is an anti-epileptic drug manufactured by Abbot Laboratories. Elderly residents residing in nursing homes and stricken with dementia have little to no control over the medications prescribed and administered to them; therefore, they rely on the integrity and unbiased judgement of healthcare providers for their daily care.

Nursing homes routinely rely on consultants such as those in the employment of PharMerica to review the medical charts of residents on a monthly or sometimes more frequent basis. In performance of these duties these employees make recommendations to attending physicians on what drugs should be prescribed for residents of the nursing home facility.   According to two qui tam lawsuits filed in federal court in the Western District of Virginia by whistleblowers Richard Spetter and Meredith Mc Coyd, both former Abbott employees, PharMercia allegedly received kickbacks that were knowingly disguised as transactions such as rebates, educational grants and other means of financial support.

When healthcare professionals and organizations undermine the trust of the American people by participating in kickback schemes for profit, they no longer have the patient’s best interest at heart and are now disregarding the safety and welfare of the patient. This can result in patients being prescribed and administered unnecessary medication that serves no purpose other than increasing the revenue of the drug manufacturer. The FCA prohibits this type of practice and allows anyone that knows of an individual or organization that is committing healthcare fraud to come forward and report these illegal practices.